This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers, click the "Reprints" link at the bottom of any article.

October 17, 2013

Goldman’s Q3 Sales Fall 20%, Profits Flat

Revenue at the investment bank declines 44%, though the company cut costs across the firm 25%

CEO Lloyd Blankfein of Goldman Sachs. (Photo: AP)

Goldman Sachs (GS) said Thursday that its third-quarter net income was $1.52 billion, or $2.88 a share, vs. $1.51 billion, or $2.85, a year ago. These results beat estimates, but net revenue fell far short of expectations.

Sales dropped 20% year over year to $6.72 billion. Goldman's investment bank, for instance, reported a 44% drop in revenue from bond, currency and commodities trading.

The bank, led by Lloyd Blankfein, cut costs by 25% to $4.56 billion in the third quarter, and compensation expenses declined by 35%.

“Ongoing uncertainty around the economic outlook and the traditional seasonal slowdown drove a significant reduction in client activity during the quarter," said CFO Harvey M. Schwartz, in a call with analysts early Thursday.

In its institutional business, net revenues from fixed client execution were $1.2 billion in the third quarter, he says, “substantially lower than the second quarter.”

Investment management fees topped $1 billion but were 1% lower than they were in the prior quarter. Assets under supervision grew by $36 billion to $991 billion. “Net market appreciation of $19 billion was primarily in equity assets, while $17 billion in inflows were concentrated in fixed income assets,” Schwartz said.